How Your Childhood Impacts Your Relationship With Money

Those early years are like a ripple in a lake. You will feel the effects of what you learned and what you experienced for the rest of your life. To be more precise, your formative years (the time period between 0-8 years when the brain and neurobiological development are the fastest after birth) basically spark who you will be as a person. Given the importance behind your formative years and who you are today, it makes perfect sense to investigate how your childhood impacts your relationship with money.

How your childhood impacts your relationship with spending money

A child’s formative years are a potent time when it comes to defining who a child is, and who they will become in future life. They have a lasting impact on their brains and healthy development.

Rank MR, Hirschl TA. The Economic Risk of Childhood in America: Estimating the Probability of Poverty across the Formative Years. Journal of Marriage and the Family. Published online November 1999:1058. doi:10.2307/354024 via Formative Years – Why Are They Important In Child Development by Pamela Li, MS, MBA

My childhood and adult relationship with spending

I was a lucky kid. Though I grew up in Roosevelt, Long Island, a place many would consider. . .less than ideal, I never wanted for much. My parents were able to afford basically anything that I wanted. (I was a relatively cheap kid. . .don’t tell my mom I said that). That being the case, the relationship I have with spending money is: there will always be more. It may fluctuate, there will be some highs and lows, but for the most part, it will be there. With proper budgeting, I will rarely, if ever, find myself in a position where I need more than I have.

A woman lying on the couch with ten and twenty dollar bills in her hands covering her face. The over laid text reads How to Improve Your Relationship with Money. The read now button links to the article Why You Need to Improve Your Relationship with Money.

How your childhood impacts your relationship with spending

But let’s talk about how your childhood impacts your relationship with spending money if you’re on the other side of the spectrum. If you grew up with quiet birthdays or no Santa, you may be tempted to make up for your lost childhood via revenge spending (which I’ve totally talked about before, you should check it out). Conversely, if you grew up with ALL of the money, you might burn through money faster than you make it. Worse still, you might not think you need to budget at all, and one bad (or good) summer later, you’re more Oswald Cobblepot than Bruce Wayne.

How your childhood impacts your relationship with saving money

Did you get an allowance as a kid? What did you do with it? Did you run out and spend it immediately on a new toy or candy or did you save it up for something really big? Those seemingly minor choices are how your childhood impacts your relationship with saving money. If you were lucky enough to be taught to set money aside by your parents, you’re more likely to be better at saving money today.

Of course, like any coin, there’s the other side. If your parents never really talked to you about money or worse, you unconsciously picked up on how THEY felt about saving, that’s going to affect how you view saving. If you’re a parent, be careful about how you talk about saving. Saying things like “we don’t have the money to save” or “why bother saving, you can’t take it with you” can leave an imprint on your kids that may take decades to shake.

Common behaviors and attitudes with money as a result of your childhood

1. The “Gimme” Attitude: If your parents spoiled you as a child, chances are you’ve developed the habit of expecting to get what you want without having to work for it—and this attitude can bleed over into adulthood and lead to excessive spending.

2. Unnecessary Guilt: Did your parents always make you feel guilty if you asked for something they couldn’t afford? That guilt can stay with you and lead to feelings of obligation when buying gifts for others or splurging on yourself.

3. Newfangled Technology FOMO: Did your family have the latest gadgets growing up, so you were always playing catch up with the Joneses? If so, you may have difficulty resisting the temptation to buy things like video game consoles, phones, and other tech toys beyond your budget.

4. Shopping Therapy: Did your parents use shopping as a way of coping with stress or their unhappiness? If so, you may have picked up on the habit and used retail therapy to make yourself feel better.

5. Other People’s Opinions: Is your family big on ensuring everyone looks nice? If so, you may struggle with overspending when it comes to keeping up appearances—whether it’s buying a certain brand to look cool, or having the latest trends.

A special note on money trauma

A bad relationship with money is like that couple you know who seem to hate each other but stay together anyway. They bicker and argue, never do anything fun and always end up in disagreements over how to spend their cash. Money can make them anxious and overwhelmed, leading to decisions they regret later on down the line.

Money trauma is a different story. It’s like having an abusive partner—the kind of person who controls your finances and puts you in life-altering debt. They’re the kind of person who never listens to reason and leaves you feeling embarrassed, scared, and helpless every time they open their wallet. Money trauma can haunt you for years after the relationship ends.

Dealing with money trauma

Money trauma can manifest in many ways in adults, from difficulty budgeting and saving money to unhealthy spending habits. For example, you may find yourself overspending on unnecessary items or compulsively shopping as a way to feel better. You might also be drawn towards investments that promise quick returns but could leave you struggling financially.

It’s important to recognize and acknowledge money trauma, as it can be a sign of deeper emotional issues. Trying to ignore or suppress its effects won’t make it go away, so finding ways to address your underlying feelings is key. This could involve talking to friends and family about your financial concerns or seeking professional help from a therapist who specializes in financial well-being.

Another way to address money trauma is to practice mindful spending. This involves taking the time to assess your wants and needs, considering the implications of a purchase before you make it, and being aware of the emotional triggers behind certain purchases. With mindfulness, it’s possible to become more conscious of how you relate to money and start making healthier decisions regarding your finances.

Although money trauma can be difficult to overcome, with the right support and effort it’s possible to start creating a healthier relationship with money. Understanding your triggers, developing mindfulness techniques, seeking professional help if needed – these are all important steps towards financial healing. It won’t happen overnight, but taking small steps in the right direction can help you create a healthier relationship with money and overcome your trauma.

How can we do better as adults?

With either type of relationship — bad or traumatic — money can become a major source of stress and worry in life. It’s important to recognize the differences between the two so that you can find ways to better manage your finances.

Admitting you have a problem is always the first step. When you start to realize there’s a disconnect between you and your money, it’s time to start figuring out why. Your childhood is usually a great place to start.

When your money beliefs don’t support you and your values in the adult world, it’s time to construct a new set. You start by understanding that just because your child-mind absorbed a message doesn’t mean it should be part of your life now.

How Your Childhood Affects Your Money Today
And what you can do about it via by Michael F. Kay | June 2, 2016

Remember, money is neither good nor bad – it’s simply a tool to help you achieve the life that you want. With the right approach and attitude, you can learn to manage your finances in a way that works for you. And above all else – be kind to yourself. Your money story is yours alone, and it’s important to remember that you are not defined by your financial situation.

Ask for help managing your relationship with money, if you need it

Understand, this may not be something you can handle alone and that’s ok. Sometimes, the solution can be found in a money coach or a money coaching app that can guide you through new strategies to change your relationship with money. Other times, it will require something a bit more intense.

If your money beliefs have become intensely problematic, you might consider working with a therapist who specializes in Cognitive Behavior Therapy to help you build new habits that support the life you crave.

How Your Childhood Affects Your Money Today
And what you can do about it via by Michael F. Kay | June 2, 2016

It all starts with introspection. Look at yourself and look at how you view your money. Now, decide “is this ok? am I ok with this?” If the answer is no, it’s time to get to work. Never forget, you deserve the happiness that a better relationship with money can bring. Your past is simply a part of who you are. Not only can you change your present self but you can make your future better by doing so. You got this.

Headshot picture of the writer of this article, Kenneth Medford III, with a muted black and white filter.
Kenneth Medford III

Writer, rhymer, gamer: the easiest way to define the man known as Kenneth Medford. I’m a simple man who loves to learn and loves to help and I wander the digital world trying to find ways to sate my hunger for both. Basically, I’m Galactus but helpful.

Check out my other work here or reach out to me on LinkedIn.

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